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Reverse Mortgages and Delaying Social Security Retirement Benefits

Recently, the US Consumer Financial Protection Bureau (CFPB) released a "warning" against using a reverse mortgage to delay initiation of Social Security retirement benefits.

This opinion piece says that the CFPB used flawed analysis.

Excerpt :

The [CFPB] report states that a reverse mortgage’s “increasing loan balance will slowly reduce the available home equity to homeowners.” That is not how a reverse mortgage works. Can a reverse mortgage’s increasing loan balance reduce the available home equity? Sometimes, but often, it does not. If you borrow $30,000 with a reverse mortgage, and the debt grows by 6 percent each year but your $500,000 home grows at 4 percent a year, your home equity does not shrink. The CFPB statement is blatantly false and harmful to consumers reading the report with its incorrect connotation about how debt works.


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Not affiliated with the US Social Security Administration